eFC Briefing: Hedge Fund Growth Slows

Newly launched hedge funds raised 40 percent more capital through June, but the number of launches fell 50 percent from 2007. London-based i-bank Collins Stewart is adding staff in New York. Compliance hiring upturn bypasses Chicago.

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Only half as many new hedge funds began trading in the first six months of 2008 as in the same period last year, with the largest launches grabbing a bigger share of new capital raised. Because hedge funds tend to operate with small staffs, especially in their first year or two, the immediate effect on employment is likely to be marginal. According to Absolute Return magazine's survey, as reported by FINalternatives, 35 funds began trading through July, raising 40 percent more money at launch than funds launched in the first half of 2007. More than a third of the $19.5 billion total capital raised this year went into Goldman Sachs' $7 billion GS Investment Partners fund.

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Collins Stewart is beefing up its New York team, reports Crain's New York Business. Over the last 12 months the bank has made as many as 60 hires in New York, although net headcount has only risen by about a dozen as low producers have been let go. In June the bank hired a team of oil analysts from the boutique Ferris Baker Watts, and a group of biotech analysts from Jefferies & Co. Earlier, it tapped a team of New York-based bankers to uncover business opportunities in China.

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While compliance jobs at all levels abound in New York, San Francisco and other parts of the U.S., in Chicago the market remains sluggish, recruiters say. Blackrock, BNY Mellon, Barclays Global Investors, Deutsche Bank and Bloomberg have active searches advertised on job boards for chief compliance officers, compliance managers and compliance analysts - though not in Chicago).

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GLG Partners said it hired Bart Turtelboom and Karim Abdel-Motaal from Morgan Stanley to shore up the group running its emerging-markets hedge funds, ahead of the departure of emerging-markets chief Greg Coffey.

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Talk is heating up that State Street Corp. is planning to move some of its workforce to the Boston suburbs. The Boston Business Journal reports the giant custodial bank is considering occupying as much as 800,000 square feet of office space outside the city, and may build a suburban campus. State Street, which employs about 27,000 people around the world, increased its headcount in the first quarter because of the growth in new business, and continues to hire.

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Employees at Washington Mutual, a key consumer and mortgage lender, face the prospect of more layoffs later this year. The Seattle Post-Intelligencer reports the bank told employees more layoffs may be needed to shed costs. Washington Mutual has already cut thousands of jobs this year as it tries to stave off further losses in its lending portfolio.